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David at Imperial Beach

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  • All three major averages now lower for 2014 [View news story]
    We eventually have to have a major sell-off in all paper assets. They are way out of balance with the underlying economy. QE has ended. Why not now? My advice is to get out of stocks and bonds and into anything real that has been undervalued for the last year and a half. That's primarily commodities, including especially gold. Most commodities are trading down around their production costs. This is not sustainable.
    Oct 15 03:23 PM | Likes Like |Link to Comment
  • All three major averages now lower for 2014 [View news story]
    There are three reasons SQQQ may not be giving you the results you think it should: 1) Like QQQ and TQQQ, SQQQ is based on the NASDAQ 100, not the broader NASDAQ index. QQQ is still positive YTD, but not the broader index. 2) All 3x leveraged funds are reset on a daily basis. Over time, the 3x leverage applied daily only results in about 2.5x the return of the base index. This result varies depending on how volatile the index has been during the time period. 3) All 3x leveraged funds have high expenses compared to normal funds, and this introduces a downward bias to the 3x funds.
    Oct 15 03:18 PM | Likes Like |Link to Comment
  • Roadblock for Tesla Motors in Michigan [View news story]
    The legislators of Michigan shot themselves in the foot:

    445.1582 Act inapplicable to dealer outside Michigan.

    Sec. 22.

    Notwithstanding the terms, provisions, or conditions of a dealer agreement, this act shall have no application to dealers located outside the state of Michigan.
    Oct 15 02:10 PM | 6 Likes Like |Link to Comment
  • Why Low Interest Rates Are Giving Gold The Buy Signal [View article]
    "Gold in itself is merely a metal with limited use..." Fiat currency in itself is merely paper with limited use! Since when have investors concerned themselves with how "useful" an investment is? Do investors in entertainment companies worry that entertainment in itself is a useless waste of time? Do bond holders worry that bonds in themselves only return useless paper with portraits of dead presidents? How about stock holders who also only end up with dead presidents as a return for their investment? Gold is a far more useful substance than any of these other investments. Ever try to make jewelry out of paper? Not impressive enough to give to your wife, but your daughter might like to pretend if you make it pretty enough.
    Oct 15 01:11 PM | 1 Like Like |Link to Comment
  • HBO to be a stand-alone service in 2015 [View news story]
    If ESPN goes stand-alone, then watch out below for the cable companies and the cable-only channels like home shopping that aren't entertaining enough to go stand-alone. I mean, who will want to stay on cable when all the best offerings are available stand-alone, probably for less, and without commercials?
    Oct 15 12:30 PM | 2 Likes Like |Link to Comment
  • Dollar slides, gold advances as stocks and yields decline [View news story]
    In the end, gold wins! $1243 is still a very good price. Back up the truck!
    Oct 15 12:02 PM | 2 Likes Like |Link to Comment
  • Europe plunges as money exits periphery [View news story]
    No house of cards stands in an earthquake.
    Oct 15 11:59 AM | 1 Like Like |Link to Comment
  • Europe plunges as money exits periphery [View news story]
    The Dow and the dollar are also imploding. The smugness is unwarranted.
    Oct 15 11:57 AM | 2 Likes Like |Link to Comment
  • On the hour [View news story]
    Reality starts to intrude on the Dow and dollar fantasies.
    Oct 15 11:55 AM | 1 Like Like |Link to Comment
  • No Relief For GLD Longs On The Horizon [View article]
    You've described very well the current illusion. But it's simply not real. The "robust" job numbers aren't robust at all compared to the growth in the working age population. The US cannot be the only strong economy around the globe. Sorry, that's another illusion created by an overly strong dollar. The US is just an empty storefront that is better decorated than all the other storefronts in a movie stage set. Pretty soon the actors are going to pull the Christmas decorations down and stage a gunfight. It's all part of the illusion.

    The Fed cannot actually raise interest rates as they have been jawboning. If they do, they will precipitate a budget crisis in the federal government. With the stock market at the start of a downward spiral now, it's questionable whether we will even get into next year without them announcing another round of QE. No rate hike or more QE = crashing dollar. The dollar is up precisely because the rate hike of next year is already priced in. When it doesn't come, watch out below.
    Oct 15 11:38 AM | 14 Likes Like |Link to Comment
  • So Much For Rate Increases... [View article]
    I agree with the author that the Fed is between a rock and a hard place. If the Fed raises rates next year, it will almost certainly cause a federal budget crisis, and also a stock market crash (if we're not already in one). If the Fed starts another round of QE it will lose all credibility. We'll see a sharp about face in the dollar with no obvious stopping point. Even if the Fed fails to raise rates next year, it is likely that the dollar falls, since a rate hike is already baked in. TPTB obviously want the dollar to be strong so the euro has an export advantage. It seems like a good recipe for a global recession to me. If not, then it puts pressure on commodity producers, who predictably enough will start cutting back on production, leading to shortages and price spikes. It's these very shortages and price spikes that another Seeking Alpha author blames for creating hyperinflations.
    Oct 15 08:12 AM | 1 Like Like |Link to Comment
  • Intel To Skeptics: 'I Told You So' [View article]
    Not as much as you might think. Microsoft had publicized the sunset date for XP years ago and a significant number of XP users chose to ignore it. Many of these customers are using XP on systems with limited functions, they continue to adequately perform those functions, and the owners have no intention of replacing or updating them until they stop being functional. Then they will replace the entire system with a newer PC and newer operating system. Microsoft support is not critical to these systems since they are performing routine functions that do not require attention from Microsoft. Significant numbers of them are not even connected to the internet. You will continue to see a large but dwindling XP population for years.
    Oct 15 07:58 AM | 2 Likes Like |Link to Comment
  • Trouble Looming For The U.S. But Not Gold [View article]
    <<The Fed wants to "inflate away" its debt which will be impossible if the dollar remains strong.>> Actually, the Fed does not have debt. The Fed has assets. It is the Federal government that owes trillions of dollars. The two entities are not the same.

    Gold must go higher between now and the end of the year. The holiday buying season is here for gold, and the low price has already stimulated strong demand in Asian markets. If stocks continue to roll over in the rest of October, you'll suddenly see a return of investors to gold. Gold is already doing better YTD than SPY.
    Oct 15 07:48 AM | Likes Like |Link to Comment
  • For Buy-And-Hold Investors, It's Really Hard To Lose Money In The Stock Market [View article]
    Adding to what Gary said, if you use the price of gold as your deflator, the Dow's performance does not look all that great: Perhaps if you're going to use a buy-and-hold strategy, you should consider buying and holding precious metals either instead of or in addition to blue-chip stocks.
    Oct 15 07:32 AM | 1 Like Like |Link to Comment
  • Gold Outperforms Stocks Year-To-Date [View article]
    Of course, at the top of a bull market stocks should be registering strong outperformance. The fact is though, that stocks have pulled forward performance that will have to be given back over the next 3-5 years due to mean reversion. Forward looking investors should be looking for assets that have recently been underperforming because this is where you're going to find the outperformers in the 3-5 years. Commodities in general, and precious metals in particular, are the asset classes where investors should be focusing.
    Oct 15 06:57 AM | 5 Likes Like |Link to Comment